Made redundant at 65, but his job was still being done

What happened

Kevin Sempf started work at Transportable Shade Sheds in Landsborough, Queensland, in September 2008. He worked full time in the company's W10 shed, where shade shed frames were produced, and he was also qualified as a truck driver. By 2012 he was 65 years old and, on the company's own account, its highest paid production employee.

On 24 September 2012 his manager handed him a letter. It said that "due to a lack of available work, we unfortunately find it necessary to terminate your employment", and that he would get two weeks' paid notice. There had been no warning and no discussion beforehand.

The company later explained that it had lost $24,989 in July and $27,623 in August, and that with few new orders it was "left with no option" but to let go of its highest paid production worker. It said his performance had never been an issue.

The claim

Mr Sempf applied to the Fair Work Commission under s 394 of the Fair Work Act 2009 (Cth) for an unfair dismissal remedy. He said there was no genuine redundancy, that he had not been consulted, and that at his age he was entitled to four weeks' notice, not two.

The company gave two answers. First, it said the dismissal was a genuine redundancy, which is a complete defence to an unfair dismissal claim. Second, it said it was a small business employer with 14 employees, so it did not have to pay redundancy pay.

At the hearing the company was represented by a human resources manager who had joined only three months earlier and had no first-hand knowledge of what happened. Its written submission had been prepared by a marketing employee, who did not give evidence. The manager who actually dismissed Mr Sempf had left the business and was not called.

Was it a small business?

Under s 23 of the Act, a small business employer is one with fewer than 15 employees, and associated entities (related companies, or companies one of them controls) are counted as one. The company produced no evidence of how many people it employed, only a statement that it had 14.

Senior Deputy President Drake held that, without evidence, it could not be found a small business. The Commission also found that the company and Hahn Environmental Services, a related company whose chief executive was the company's director and which shared its human resources department, were associated entities. On both grounds, the company was not a small business employer.

Why it was not a genuine redundancy

Section 389 of the Act says a dismissal is a genuine redundancy only if the employer no longer requires the person's job to be performed by anyone because of changes in its operational requirements, and the employer has complied with any award or agreement duty to consult. It is not a genuine redundancy if it would have been reasonable to redeploy the worker within the business or an associated entity.

The company failed the first step. Its financial reports showed only that it "had had two adverse financial results". A co-worker, Mr Sempf's offsider, gave evidence that the workshop was busy and that he began doing Mr Sempf's duties as soon as he left, for a dollar an hour more and with an assistant. The Commission was satisfied the company "still required Mr Semph's job to be performed".

It found there was no consultation "in compliance with any instrument, or at all". Transfer to the related company, part-time work or a pay cut were never discussed, and the company did not explain why he could not have been found other work, "particularly since he was qualified as a truck driver".

Unfair, and what he received

With no genuine redundancy, the Commission weighed the factors in s 387. There was no valid reason relating to Mr Sempf's capacity or conduct, he was not told the reason until he was handed the letter, and he had no chance to respond. The Commission also noted his service, the absence of any complaint about his work, and that his age and difficulty in finding new work were not considered. The dismissal was unfair.

Mr Sempf did not want his job back, so the Commission awarded compensation instead. It found he would have stayed at least another 12 months, had tried hard to find work and was still unemployed, and that he had "suffered considerable financial and social disadvantage". It awarded six months' compensation.

It also ordered the company to pay his legal costs under s 611: ordinary costs up to when his evidence was served, and the higher indemnity costs after a reasonable time to consider it, because his uncontradicted evidence made success highly likely, yet the company answered none of it and pressed on to an avoidable hearing.

What this means for you

If you are told your job is redundant, the question is not only whether the business is struggling. It is whether your job is still needed, whether you were consulted, and whether you could reasonably have been moved to another role, including in a related company. If someone else is doing your work soon after you leave, that is worth raising.

For employers, a real financial downturn is not enough on its own. Consult before deciding, look genuinely at redeployment, and be ready to prove the facts, including your headcount, with witnesses who were there.

Time limits are short: an unfair dismissal application to the Fair Work Commission must be made within 21 days after the dismissal takes effect.